Gibson writes: "The austerity math textbook used by all of the world's leaders who swear by the austerity method was debunked by a college student who gave the text its first peer review."

The math behind austerity has been debunked. (photo: TPM Muckraker)

Austerity: Planned Poverty

By Carl Gibson, Reader Supported News

26 April 13

f a math textbook that never underwent an official academic review and was proven to contain basic factual inaccuracies were nonetheless used by an entire school to teach math, wouldn't it be fair to say that all of that school's graduates were incapable of doing math? Wouldn't it make more sense to just replace the math textbooks instead of inadequately preparing thousands of students for basic math in the real world?

As it turns out, the "fuzzy math" George W. Bush talked about in a debate with Al Gore is actually the math used by influential European Union leaders and EU governments like Greece and Spain in the midst of a crippling depression. Those leaders have cited the study "Growth in a Time of Debt" by Harvard Economics professors Carmen Reinhart and Kenneth Rogoff as their justification for cutting billions from essential government programs and causing millions of layoffs all over Europe. The Reinhart-Rogoff study, which claims that GDP growth slows significantly when a nation's debt exceeds 90% of that country's GDP, was also cited by Representative Paul Ryan in his austerity budget that called for even more layoffs and more cushions for the rich. The only problem is that this influential study has recently been proven to be fundamentally, totally wrong.

When 28-year-old Thomas Herndon, a grad student in the UMass-Amherst Economics Department, was assigned to replicate the data from an economic study – essentially to perform a peer review – he chose the Reinhart-Rogoff paper. Turns out that study had never been peer-reviewed, and Herndon found that the study's Excel spreadsheet used to average GDP growth numbers from different countries was laden with errors. Along with several rows not being averaged in the spreadsheet's final tally of GDP growth, economic data from Canada, Australia, and New Zealand was excluded. Those are countries whose debt exceeded 90% of GDP but still experienced periods of economic growth, disproving Reinhart and Rogoff's initial hypothesis that high levels of debt hurt a nation's economy. Even Stephen Colbert made austerity a laughingstock in his recent interview with Herndon.

Essentially, the austerity math textbook used by all of the world's leaders who swear by the austerity method was debunked by a college student who gave the text its first peer review. As it turns out, firing lots of people doesn't help the economy grow, since more people with fewer jobs means fewer people buying stuff. Income tax revenues go down because people's incomes are down, sales tax revenues go down because people aren't buying stuff, and social safety net spending goes up because fewer people have jobs. It should already be obvious to anyone that austerity doesn't alleviate economic growth, but rather contributes to further economic malaise.

We've seen the consequences of austerity both here and abroad. In Europe, the endless layoffs in the public sector have contributed to record levels of unemployment, levels not seen since the Great Depression, with no relief in sight. Here in America, the recent sequester budget cuts have triggered furloughs in the FAA, making airports a nightmare as thousands of flights are continuously delayed. You can view a map here showing how many jobs the sequester has eliminated so far on a state-by-state basis.

The joblessness that is a direct effect of austerity has led to desperate situations for many Americans. While the "recovery" that took place between 2009 and 2011 benefited Americans whose net worth exceeded $500,000, the other 93% of Americans saw their mean wealth drop by roughly $6,000, according to Census data examined by Pew Research. As the youth unemployment rate hovers near 20%, college students are going hungry and homeless across America. When a Laney Walker supermarket closed in Georgia, the store had arranged for a local church to pick up all of the store's food to give to the poor. But when the church never came by, the food was unloaded into the parking lot where hungry people gathered to take it back home to their families. However, the police were concerned about the potential for a riot, so they restrained the crowd of hungry people while all of the perfectly good food was thrown in a dumpster. It's like the Hunger Games, except it's non-fiction.

For most Americans, chronic unemployment is issue #1. Yet the 113th Congress and the Obama administration, hopelessly out of touch with the rest of us, continue to focus on cutting things that most of America depends upon. Obama is negotiating backroom deals with Republicans to find ways to gut Social Security and Medicare. And at a recent 90-minute Congressional hearing on the unemployment crisis, only one member of Congress initially bothered to show up. As the web site letsfreecongress.org plainly shows, Congress votes in favor of whoever gives them the most money. Unemployed people don't have enough money to hire lobbyists. Austerity hawks like the US Chamber of Commerce and Wall Street billionaires like Pete Peterson do.

On May 18th, unemployed people from all walks of life will be marching all the way from Philadelphia, Pennsylvania, to Washington DC demanding green jobs that will address both the climate crisis and the jobs crisis. It's time for Congress to hear from those with the biggest need instead of those with the biggest wallets.

Carl Gibson, 25, is co-founder of US Uncut, a nationwide creative direct-action movement that mobilized tens of thousands of activists against corporate tax avoidance and budget cuts in the months leading up to the Occupy Wall Street movement. Carl and other US Uncut activists are featured in the documentary "We're Not Broke," which premiered at the 2012 Sundance Film Festival. He currently lives in Madison, Wisconsin. You can contact him at
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, and follow him on twitter at @uncutCG.

Reader Supported News is the Publication of Origin for this work. Permission to republish is freely granted with credit and a link back to Reader Supported News.

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The choice here is austerity, which hurts those who depend on government for an income; and money printing which hurts a country that pays it;'s debts, and widens the gap between the owners of assets, and those who live paycheck to paycheck. Neither plan is good.

Printing money might be better if governments taxed, not on incomes, but on balance sheets. People with $500,000 in equity investments four years ago have seen their investments grow $200,000 to $400,000 over the past four years, while their income may have stayed the same or even fallen. However, all governments appear to be afraid to tax assets.

No, the choice is to end supply side economics, go back to the tax structures of years of lower wealth inequality, and get the banks under control so that we don't live in a speculative economy. The problem isn't one of government budgets, the problem is that we've decimated the ability of Americans to earn a living by buying into supply side, "free market" theories that have gained traction since the Reagan years. It's killing America. It's simply what happens when we give our money to select few and they hoard it.

The choice here is austerity, which hurts those who depend on government for an income; and money printing which hurts a country that pays it;'s debts, and widens the gap between the owners of assets, and those who live paycheck to paycheck. Neither plan is good.

Printing money might be better if governments taxed, not on incomes, but on balance sheets. People with $500,000 in equity investments four years ago have seen their investments grow $200,000 to $400,000 over the past four years, while their income may have stayed the same or even fallen. However, all governments appear to be afraid to tax assets.

Therefore, either choice is bad.

I think that the essential choice is neither of these POVs. It is ultimately about the redistribution of wealth in America. Economies are all bottom up not top down. Running the money to the top has been the reason for printing money not to protect anyone whose economic wellbeing has drastically been reduced. The Financial Crisis hand the presses running to save that sectors skin but not the small investors. The ultimate in austerity is when the lowest level of citizens subsidize the rich.

Your last sentence really sums it up: "The ultimate in austerity is when the lowest level of citizens subsidize the rich." In the animal kingdom, (ever watch this on Animal Kingdom-I'm sure you have?)the greatest sense of joy to the pursuing animal is when the swift and the powerful such as a lion chases chases its prey, lunges at the throat or rear of an animal, drags it down and begins the "dinner." In the human animal world, the prey do not get eaten bodily, but financially. The animal prey dies quickly, the human prey, slowly. Does this make Ayn Rand drool?

Either choice would not be bad if we had a genuinely publicly owned federal bank (like the State Bank of North Dakota) such that the government could borrow from itself. The system has been set up so that the government essentially borrows from the private market by selling government debt at interest so that it costs us to borrow. This is an absurd system for a sovereign nation that controls its own currency and the only ones that benefit are the banks.

We need to organize and then demand the creation of genuinely publicly owned financial institutions into which our public tax dollars are deposited and then used for constructive investments such as a jobs program that rebuilds our crumbling infrastructure, builds a national high speed rail and smart grid systems and does energy efficiency retrofits of all public buildings.

This is a long term solution not only to dealing with the debt (by eliminating the need for the gov't to borrow at interest) but also will provide the capital for implementing community economic development programs that actually develop communities and provide permanent living wages jobs for people across the country.

The solution to our financial problems is in our Constitution. Check out Article One Section 8. The Congress and the Treasury Dept have the right to borrow money on the credit of the United States and to coin money and regulate the Value thereof. The Federal Reserve is a private for profit bank and has no right to print the money and set it's value. Our government has NO NEED to borrow money from those banksters and to Pay them any interest. The Federal Reserve was put in charge of the financial system of our nation late at night the day before the Congress took off time for the holiday season. Few members were in attendance and it was done by a majority of those in attendance at that late time. The Federal Reserve system is not allowed by our Constitution and must be shut down.

Fat chance our corrupt Congress will do that. You know they are working for the banks, don't you? If you don't you must spend a lot of time having your brain softened by the major media.

If the Government "cuts" were actually cuts that probably would be bad, but they are only cuts to phantom increases!

Government employees and private sector employees should have similar salaries and benefits, but they are very much out of step with each other.

Taxing SMARTER is what is needed, not taxing more!

Having better retirement options for wealthier people to keep them from collecting Social Security, while still paying in would help everyone.

Eliminating all tax deductions and reducing rates would help everyone.No tax deductions means your tax form is the size of a postcard and you don't need help filling it out.

Government grows so that politicians have more power over us, we need smarter government, not bigger government!

Some cuts are "only cuts to phantom increases" like the proposed "cuts" to the defense budget which aren't cuts at all but, as you say, cuts in the growth rate. Real cuts are what is needed in the defense budget and so this would not be bad but rather good and is long overdue.

The only reason the wages of gov't employees are "out of step" with one another is that the private sector has decimated organized labor such that the public sector is now the largest sector of unionized labor in the country. The answer is to rebuild the labor movement and increase the number of unionized workers in this country not to cut the pay of public employees.

It's a question of timing and circumstance. There's nothing wrong with printing money when it's being hoarded, for example, or when there are serious risks (and current effects) of deflation. Those are today's circumstances. Nor is there anything wrong with judiciously removing money from circulation, such as paying down public debt, when the economy is flush. That was something like the situation during the Clinton administration.

However, if one does the opposite — print money during a growth spurt or repay debt during a downturn — then one has pretty likely !@#$'d up.

Today, for every $1 the government prints, someone is willing to pay ± $1.02 for it. Real interest rates (i.e., after allowing for effects of inflation) are so low that investors are PAYING US TO BORROW THEIR MONEY. Austerity, on the other hand, is extremely expensive right now. Each dollar of debt we retire costs us the same $1.02. That's just a bad bargain.

If we were printing more money and investing it in productive and durable infrastructure, creating jobs, reducing the costs and liabilities of unemployment and poor education, growing tax revenues, creating intellectual capital and all manner of future goods, then we'd be way ahead of the game. Instead of paying back $1.02 today, we can pay back $0.98 tomorrow and have a lot of (revenue-producing, goods producing) public gains to show for it.

This is nothing short of a takeover. We have watched it coming ever since the Oil Criminals (US and OPEC et al) jacked the price of fuel and hi-jacked the economy. No one even thought to stop them, except the lone Voice of Reason, the one you guys love to hate.

The only solution is to let it crash. There is no foundation under it to warrant keeping or fixing it. We need people at the helm who are not consumed with greed, but you guys can't imagine that. 'It's man's nature,' you say. As if man is nothing more than a ravaging wildebeest.

The only solution is to let it crash. There is no foundation under it to warrant keeping or fixing it. We need people at the helm who are not consumed with greed, but you guys can't imagine that. 'It's man's nature,' you say. As if man is nothing more than a ravaging wildebeest.

Wildebeests don't ravage, they graze. They are a kind of large antelope found in Africa. It seems your knowledge of wildebeests is on par with your knowledge of economics.

Watch the latest edition of VICE on HBO if you want to see what your suggested "austerity" is doing for Europe. Overall unemployment rates at 25%, youth unemployment at 50% in many countries. Daily, violent riots in the streets from Ireland to Greece and the rise of fascism and right wing parties being fought by anarchists. Yeah, give us some of your suggested austerity programs like Europe has enacted!

This post is meant as a reply to MidwestTom, who said,(see above): "Printing money might be better if governments taxed, not on incomes, but on balance sheets. People with $500,000 in equity investments four years ago have seen their investments grow $200,000 to $400,000 over the past four years, while their income may have stayed the same or even fallen. However, all governments appear to be afraid to tax assets."

Yes, as long as the assets are "paper assets", they are not taxed. However, when an asset is sold, the profit from the asset is taxed, at capital gains rates if long-term and at regular income rates if short-term (held less that 1 year). How many times would you have assets taxed? some equities are bought with after-tax income. Taxing the paper asset would tax that income again. Also, your asset could be taxed as $500,000 one day and drop in value to $400,000 the next day, depending on how the casino (i.e., what is commonly called the Stock Market) treats you.

Planned poverty is a natural outcome when you have a totalitarian Corporate Monopoly Economy.

We need campaign finance reform to get the advertising industry and the profit motive out of our elections.

We need to get an Amendment to the Constitution banning corporate personhood.

We also need to put caps on how much money any individual or entity may accumulate. Mass accumulation is a melanoma on the body public and the results are disastrous; we have seen this in history time and time again.

We need to change our thinking and start thinking as a unit, a whole, instead of the we/they mentality of corporate greed. The only thing corporations have to offer We the People is GREED on steroids.

If a leech were drinking your blood, would you not get rid of it? Corporations are nothing but segmented worms. When do we wake up?

Along with campaign finance reform and media reform, It's time to reevaluate our failing capitalism model.

I believe that a better model going forward is going to be worker-owned-cooperative-corporations like the very successful Mondragon model.

These have already proven themselves as great alternatives when some areas fail massively. That's how the communities come back after the thieves have ran off with the profits and left everyone holding the bag. There's even examples of that in Cleveland.

These new companies' goals would not be to maximize shareholder profit but instead to maintain high employment and healthy communities. They would also not grow by mergers and acquisitions but would instead split off to remain small, as in not too big to fail with cooperative agreements.

It's time to get creative and have courage. It doesn't really work anymore. Bubbles, crashes and depressions are happening faster and faster. The system is rotten to the core and rife with corruption. It's out of control and we are not even prosecuting this massive theft.

We are actually changing our laws to protect the thieving corporations. Look at the kangaroo courts articles. Enough already. Yank the charters. That's the real revolution we need. The time for sharing and cooperation is now.

Along with campaign finance reform and media reform, It's time to reevaluate our failing capitalism model.

I believe that a better model going forward is going to be worker-owned-cooperative-corporations like the very successful Mondragon model.

These have already proven themselves as great alternatives when some areas fail massively. That's how the communities come back after the thieves have ran off with the profits and left everyone holding the bag. There's even examples of that in Cleveland....

Bravo Alternative! Great comment. I agree completely. The model in Cleveland (along with the writings of Gar Alperovitz in particular but also those like Richard Wolff) can and should be replicated nationally along with the creation of genuinely publicly owned financial institutions along the lines of the State Bank of North Dakota.

For more on the Cleveland Model (and the writings of Gar Alperovitz who also put his last book on the internet for free via Truthout.org) see:

Herndon has revealed what the rulers of Spain, Greece, the UK, the U.S.A., and the rest of the capitalist world already knew. The ruling elite's policy of austerity is not erroneous. It is their strategy of class warfare, and because they totally control the media and educational institutions, hardly any of the "99 percent" even know they are under attack. Rather, they blame their pain on each other and on foreign boogeymen created by the media.

I encourage everyone to read The Iron Heel by Jack London. He wrote it in 1907 and supported his story with information from the 1900 census. The ruling class has always waged a class war because it controls the message and the church. If democracy is to succeed then the onus is on the 99%. They must be constantly vigilant of the message. In the last 40 years GOP have been telling Americans that they are lazy, no good for nothing, Godless people who must work their fingers to the bone for the rich as penance. Americans bought it without question and punished those who did question the message. Democracy is a process that ensures the people get the government they deserve.

Chronic unemployment could be greatly reduced by maintenance and repair of our decaying infrastructure. I would start by replacing lamp poles with much sturdier ones. They will be needed when we finally get around to hanging the fatcat 1% and the even grosser pols who take their bribes.

When we were a nation with little debt, and operated with a nearly balanced budget there was little inflation, and the wealth gap was much smaller than today.

Athletes and probably no more than 250 corporate chiefs actually get a paycheck for more than $25 million per year. That is big money, but it does not compare to the growth in wealth these people make from their assets. If one invested $10 million at the bottom of the 2008 crash, it would probably be worth 2 to 3 times that today, yet it would not be taxed as income until sold.

People who do not save, and live paycheck to paycheck do not participate in this wealth gain, which far exceeds so called take home pay, The 'printing' of money to jump start the economy and create jobs only accelerates the dollar value of income producing assets. A Treasury bill purchased 6 years ago has almost tripled in value, but only the upper income people could have spent the $10,000 to buy one. Meanwhile wages have gone down.

In my first job the company had a 50+ year old man named Stanley who cleaned up spills and did all of the dirty work. He drove an old car, lived in a small hose, and would ask to use the phone to call his Broker and trade trade $50,000+ worth of stock.

The truly wealthy get there with investments in assets, not stuff that depreciates.

When we were a nation with little debt, and operated with a nearly balanced budget there was little inflation, and the wealth gap was much smaller than today.

The country was founded on debt (Hamilton believed that the debt was necessary to hold the country together).

And, the wealth gap and concentration of wealth has always been vast in this country. that did not really begin to change until the Progressive Era when we first got an income tax that taxed the rich heavily. And, the only reason we got this was not due to economics or because we elected the "right people" or out of the goodness of some politicians heart but rather because people organized and fought for it (e.g., the populists in the late 19th century and into the 20th with the growth of the modern labor movement).

Also, the economy and our currency worked in fundamentally different ways when the system was based on precious metals so debt today compared to the current "fiat currency" system in which the government has the power (if it chooses to use it) to create it's own money (instead of borrowing at interest from the banks or others) based on need and demand. Printing money is not inherently inflationary (we've printed trillions in the past few years with virtually no effect on either the value of the dollar or inflation)...like other commodities it is largely due to supply and demand.

So true Midwest Tom, but when the average worker is paid barely enough to meet the necessities, the American people are lucky if they can even save the change in their sofa cushions-if they have a sofa. When jobs are exported or plain eliminated people can't save anything. Economics 'The mind forged manacles' to quote Wm. Blake. Economics can be reinvented to serve people's needs not that of the oligarchs who own and run the corporations who offshore money avoid taxes and decimate whole populations economically and environmentally.

The "Golden Age" of the 50's and 60's that you talk about was back when we had 90% as our top tax rate. That's why "we were a nation with little debt."

Since then, the "Reaganomics Supply Siders" have been in control and bankrupted most of us.

The top 1% has taken 93% of the money regained in the recovery and most of the rest of us have lost yet again. We can't afford lobbyists to write laws for our congressmen like you austerity mongers can.

Since you guys have it rigged so that you win either way it's starting to look like we need to check the deck and see how you have the cards marked.

I do see your point, MidwestTom, but how should such a tax be structured and how often levied? It should certainly be graduated so as not to hurt the "small investor", whose portfolio is "modest", less the $1M, say, and is the person's chief retirement asset. Perhaps graduating the capital gains tax or taxing all capital gains in excess of some certain amount at regular income rates would help. But, more important, in my opinion, is eliminating the "carried interest" travesty that allows people like Mitt Romney to pay an effective tax rate of 15% or less and eliminating the ability to avoid taxes altogether on money kept off shore (now, that is a sequester we really don't need).

As for Stanley, I say bravo and more power to him. And it appears that he did it without hurting anyone, contrary to how the predatory takeover vultures make their money. I do not think that shrewd and frugal people like Stanley should be punished for their efforts, but the people who make more salary in a day than Stanley did in a year do need to be reined in.

When my son was stationed in Germany we had the experience of spending Christmas there. We stayed in an ordinary hotel with mainly Germans. The thing that impressed me was that the kids got one or two very high quality gifts. No plastic junk, and no mountain of gifts. Germans save, and they now financially call the shots in Europe.

When my son was stationed in Germany we had the experience of spending Christmas there. We stayed in an ordinary hotel with mainly Germans. The thing that impressed me was that the kids got one or two very high quality gifts. No plastic junk, and no mountain of gifts. Germans save, and they now financially call the shots in Europe.

Were you also impressed by the relatively high (compared to the US) wages of German workers or the fact that their workforce is made up of far more (percentagewise) unionized workers than ours or that they get much better benefits including a national health care system and 4-6 weeks vacation and that they work on average less hours than American workers.

Were you also impressed that all of this has in no way undermined the German economy?

I was also impressed that non-German workers (Muslims mainly) could only be in the country for 7 years, and their children born there are not German citizens, those maintaining more of a feeling of unity.

I found food and cultural events far more important to the average person than here. I also liked their housing construction rules. No sprawling towns. Any new house was built on the immediate edge of the town. The houses were built to last, not vinyl covered wood frame like we build.

The difference between the former socialist East Germany and the former West Germany was very pronounced sixteen months after the wall came down. In the eastern part the stores had little selection, were drab, and the place was filthy. Most of the people looked tired; however, we periodically were thanked for bringing down the wall.

The German health care system today is universal, but at least five to ten years behind ours in advances. My surgeon brother-in-law is married to a European, and frequently comments that Europe simply does not have the expensive electronic toys that are common here in heart and eye operations, and orthopedic situations. Much of our medical equipment is made by Siemans (a German Company) but they sell far more here than in Europe. The wealthy in Europe all go to private practice doctors who have the toys.

I have friends who retired to live in Germany and France and won't return to the US. They describe health care in a more possitive light. Equally modern, focused on outcome.It has to do with economy of scale. When we compare their experience with ours and how much it cost for poor outcome we wish we'd saved enough to retire abroad too. I have to agree reguarding cultural events and urban planning that accomodates pedestrians and mass transportation that's well connected. In my opinion, America is 50 to 60 years behind Europe in many ways and not very socially friendly.

I was also impressed with the German acceptance of acceptance of a lower economic living standard than here. By that I mean one, many times older, car per family, much smaller (but better built) houses and apartments. The emphasis in clothing, tools, and almost everything was on quality, not quantity.

I wished i knew an answer to all of this greed that now occupies the leading countries of this world and especially in America-it is rapidly destroying the framework of this once great country..until the people start to stand together and votes these ugly CONGRESSMEN and SENATORS out of office then there is nothing will change- but how to you wake the majority up so far here in Texas the majority still votes for the Republicans..and there is a large number of conservative fanatic believes religions- what to do..the oil companies are all over this area- doing the "frackin for more oil and of course this local major who also works for a oil company has given the oil people the right to use our disappearing fresh water-and we are about to go to stage 2-which means no watering outside-it doesn't matter to them-and when they get the oil they will sell it to China!..it is totally insane!

It would be ever so refreshing if someone would actually use their reading skills and study what sort of "capitalism" the founders gave us. The Cary family published Ben Franklin's material and Henry Cary was in President Lincoln's cabinet. His influence on the country was profound as he taught the essentials of American capitalism to many people including the future president, James Garfield.(who was also assassinated) The differences between American capitalism and European capitalism(societal cannibalism)are significant. Thomas Jefferson expressed it well when he said we have given you "the people's capitalism." What will it take to get people to stop trashing the economic heritage they know nothing about and start questioning the tripe that so many graduates of the Chicago School of Economics have been belching out for generations??

It would be ever so refreshing if someone would actually use their reading skills and study what sort of "capitalism" the founders gave us. Thomas Jefferson expressed it well when he said we have given you "the people's capitalism." What will it take to get people to stop trashing the economic heritage they know nothing about and start questioning the tripe that so many graduates of the Chicago School of Economics have been belching out for generations??

I agree with you completely about the garbage that the Chicago Schools puts out but as for the "people's capitalism" that the founders gave us...it was a capitalism based on slavery and the slave trade, indentured (or chattel) labor and the hyper exploitation of particularly unskilled laborers (many of whom who built the canals, the bridges, the roads, the buildings, etc.,) and the theft of native people's land and the death of millions of native people's...and Jefferson died in debt (in today's money probably $1-2 millon). I don't know anything about Garfield's economic ideas/program and so here you have given me something new to research.

There has never been and will never be a "people's capitalism"....it's a contradiction in terms.

Thanks for your reply. The practice of slavery was a mark of the time...not the basis for the American economic model. The term "par economy" is what the American system was based on...it is not a debt based system feeding only the rich. If you'd like to read a more modern update of the American economic system, find a copy of "Unforgiven" by Charles Walters. You might also try to find transcripts of the lectures that Carl Wilken presented to Congress in the late 30s and early 40s...he basically taught them what to put into the "War Stabilization Act of 1942." And finally, "Wealth, Virtual Wealth and Debt" by the physicist Frederick Soddy will give you a far truer picture of how the American system has been turned on it's ear than you will find anywhere else. Happy hunting!

This article misrepresents the situation, In spite of the errors Herndon found, both the original research and Herndon;s research showed a strong correlation between debt levels and lack of economic growth. The corrections merely eliminated the "threshhold" figure that had been proposed as an alarm point. Higher debt is strongly correlated with low economic growth and low debt is strongly correlated with high economic growth.

What is the new adjusted threshold? Once the real numbers were used and the calculations corrected, their results actually demonstrated that the Keynesian leaning economists were correct in their analysis that short term high debt is necessary for an economy to recover.

That the Keynesian influenced concept actually have a narrative that legitimizes the theory, while the neo-cons don't seals the deal.

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